WRITTEN DIRECT TESTIMONY OF JANICE DE FREITAS (CBC - RIGHTS ADMINISTRATION) 2004—2005 Cable Royalty Distribution Proceeding Docket No. 2007-03 CRB CD 2004-2005 1. Introduction I am Manager of Rights Administration for the Canadian Broadcasting Corporation/Radio-Canada (CBC/Radio-Canada) at the Head Office in Ottawa. I have worked for the CBC since 1980. For the last 15 years, I have served as Chairman of the Canadian Claimants Group (CCG). Before assuming my current position, I spent nine years in CBC’s television program distribution department eventually managing the Educational Sales unit. Those responsibilities called for me to be familiar with the English television network’s programming, and rights administration. CBC/Radio-Canada is Canada’s national public broadcaster, and one of its largest and most important cultural institutions. It was created by an Act of Parliament in 1936, beginning with Radio. Bilingual television services were launched in 1952. CBC/Radio-Canada is licensed and regulated by the Canadian Radio-television and Telecommunications Commission (CRTC)1. CBC/Radio-Canada employs approximately 9,930 Canadians in 27 regional offices across the country. CBC programming is provided on multiple platforms: television (both traditional over-the-air and cable networks), radio, the Internet, satellite radio, digital audio and a recording label. Through this array of activities, CBC/Radio-Canada delivers content in English, French, and eight aboriginal languages. In addition to this, programming is available in seven other languages including Spanish, Russian and Mandarin on both Radio Canada International, and Web-based www.rciviva.ca, a radio service for recent and aspiring immigrants to Canada. 1 The CRTC is an independent authority in charge of regulating and supervising Canadian broadcasting and telecommunications, equivalent to the FCC. CBC/Radio-Canada’s conventional broadcast stations are located in Canadian cities across the nation, many in near proximity to the United States. Due to this, CBC and other Canadian television stations are long-established components of both the over-the-air and cable television markets along the U.S.-Canada border. The CBC has been a participant in these cable royalty proceedings since their very inception and is the founding member of the Canadian Claimants Group. The CBC, through it Rights Administration Department, continues to head the Canadian Claimants Group. One of my primary responsibilities for the last 18 years has been supervision and administration of responsibilities related to the U.S. cable retransmission claims of Canadians. Most recently this has included preparing this direct case. Today, I am appearing in several capacities: • As Chairman of the CCG, I am here to provide an overview of our claim, to introduce our other witnesses, and to provide background information on the eclectic group of producers, distributors and broadcasters who are members of the Group. • As an employee of the CBC/Radio-Canada I will provide some background information and generally describe CBC/Radio- Canada’s conventional television networks and the programming they broadcast because most of the Canadian distant signals retransmitted in the US are CBC/Radio-Canada English or French stations. • Finally, I will sponsor cable carriage and royalty data that we have obtained from Cable Data Corporation that reflects the increase in carriage and royalties paid by Form 3 cable systems for the distant retransmission of Canadian television stations. 2. Overview of Our Claim The Phase I claim of the Canadian Claimants Group encompasses the programming shown on all distant Canadian television signals, excluding that claimed by U.S. groups. The members of the CCG all have programming that was carried on Canadian signals retransmitted in the U.S. by Form 3 cable systems during 2004 through 2005. The Canadian signals retransmitted in these 2 years are listed below in Table 1 along with their network affiliations and their language of broadcast: Table 1 Canadian Signals Carried by Form 3 Systems on a Distant Basis in 2004 through 2005 Signal Affiliation Language CBAFT CBC French CBAT CBC English CBET CBC English CBFT CBC French CBLT CBC English CBMT CBC English CBOT CBC English CBUT CBC English CBWT CBC English CFCF CTV English CFTO CTV English CHCH CANWEST GLOBAL English CHLT TVA French CIII CANWEST GLOBAL English CIMT TVA French CISA CANWEST GLOBAL English CJOH CTV English CKRT CBC French CKSH CBC French CKWS CBC English CKY CTV English It is important to note that Canadian signals may only be retransmitted within the compulsory zone, a specific geographic region of the United States. This is illustrated on page one of Exhibit CDN-1-A. The remaining four pages of Exhibit CDN-1-A are maps that illustrate where these distant Canadian signals were retransmitted in the United States. These maps show each Canadian station that was retransmitted by a Form 3 cable system during 2004 3 and 2005, identifying the state(s) in which they were retransmitted as reported on the systems’ Statements of Account. 3. Our Witnesses In preparing this direct case, we have once again focused on demonstrating the relative value to cable operators of the different types of programming broadcast on Canadian distant signals. We conducted two annual surveys of cable operators who carried distant Canadian signals in 2004 and 2005. Professor Debra Ringold will present the results of those studies, which remain consistent with past results. The U.S. cable operators that carry distant Canadian signals attribute nearly 60% of the value of the Canadian signals to the Canadian programming on those stations and the remainder to the programming claimed by Joint Sports and Program Suppliers. To provide first hand exposure to Canadian television we will present two witnesses who represent different genres of programs, Alison Smith and Joan Fisher. Alison Smith is a CBC news correspondent currently based in Washington, D.C. She is a professional journalist who has worked with CBC for over 30 years and served in numerous capacities. She is appearing to provide an overview of the CBC’s network news operations. Joan Fisher is Legal Counsel for Decode, one of our CCG program suppliers. Decode is an innovative, sought after producer of live action and animation series for many age ranges, from preschoolers to teens. Their productions have been successful at home in Canada and around the world. 4. Our Members I am sponsoring information I collected that identifies and describes members of the Canadian Claimants Group. Attached to my testimony as Exhibit CDN-1-B are lists of the Canadian Claimant Group members for 2004 and 2005. Exhibit CDN-1-C provides an alphabetical collection of profiles describing each member. The Canadian Claimants Group is comprised of the CBC, private Canadian broadcasters, and affiliated broadcast stations as well as Canadian film and television producers and distributors. Our members have had considerable success licensing their programming in the U.S. and elsewhere. This is an indication that Canadian programming is valued and popular in the United States and internationally 4 Exhibit CDN-1-D is an informal sample of the numerous Canadian properties licensed to U.S. television services by some of our members. I gathered this data to illustrate the demand for Canadian programming in the U.S. cable and broadcast marketplaces. The exhibit shows a broad range of clients in the U.S. It is evident from the list that cable networks are significant clients for Canadian producers. We believe this is important evidence of the appeal of Canadian television programming to U.S. cable operators, since they are the relevant marketplace for both cable network programming and distant signal programming. Our members also supplied information about awards they received for their programs and sample descriptive brochures.2 Exhibit CDN-1- E reports on some of the awards won by Canadian Claimants. Additional award information is included with the testimony of our other witnesses. 5. The Canadian Broadcasting Corporation/Radio-Canada As I noted in the introductory paragraphs of this testimony, I would like to provide some background and general information about the Canadian call- signs that are most often retransmitted as distant signals in the United States. They are CBC/Radio-Canada’s English and French network stations, referred to as CBC Television and Télévision de Radio-Canada respectively. Back in the 1930s the CBC was created largely in response to concerns that Canadian culture would be drowned by the flood of American broadcasts if a Canadian service was not established. Our mandate, as laid out in Canada’s 1991 Broadcasting Act, states that: [T]he Canadian Broadcasting Corporation, as the national public broadcaster, should provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains; [T]he programming provided by the Corporation should: i. be predominantly and distinctively Canadian, 2 For this proceeding, we have omitted our usual collection of promotional material (program descriptions) received from our members. 5 ii. reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions, iii. actively contribute to the flow and exchange of cultural expression, iv. be in English and in French, reflecting the different needs and circumstances of each official language community, including the particular needs and circumstances of English and French linguistic minorities, v. strive to be of equivalent quality in English and French, vi. contribute to shared national consciousness and identity, vii. be made available throughout Canada by the most appropriate and efficient means and as resources become available for the purpose, and viii. reflect the multicultural and multiracial nature of Canada. A. CBC Television (English Language) In 2004 through 2005, the English network consisted of 27 stations, from coast to coast. Fifteen of these stations were owned and operated by CBC and 12 were affiliates.